Quick Answer: What Is Fixed Salary?

What is DA in salary?

Dearness AllowanceThe Dearness Allowance (DA) is a calculation on inflation and allowance paid to government employees, public sector employees (PSE) and pensioners in India, Bangladesh and Pakistan.

Dearness Allowance is calculated as a percentage of an Indian citizen’s basic salary to mitigate the impact of inflation on people..

Does PF get doubled?

According to the rule, any employee can increase his monthly contribution up to 100% of basic salary. If any employee doubles his monthly total, then the amount of his PF fund will double itself.

Is fixed salary in hand salary?

Understanding Basic Salary It is a fixed sum paid to employees in exchange for the work performed by them. The basic income is derived before any reductions or increases due to overtime or bonus, allowances are made. … The entire amount of the basic salary shall be part of the in-hand salary.

What is fixed pay in CTC?

The base salary which is definite regardless of the employee performance including other allowances minus tax on a monthly basis is defined as fixed pay and variable pay is a bonus or reward given to the employee for his/her high standard of performance in the company for the current year and is taxable.

Is PF part of fixed salary?

Take a look at your CTC break-up and you will find fixed heads like basic pay (usually 40-50% of the CTC), home rent allowance (usually 40-50% of the basic salary), gratuity, PF, and reimbursements such as car fuel and mobile bills, apart from variable components such as annual bonus and performance bonus.

What is difference between fixed and variable salary?

Fixed pay is the fixed amount of salary that an employee gets at the end of the month whereas Variable pay is the incentive paid to the employee, monetary or non-monetary, based on their performance for the month. The ratio of fixed to the variable component, as a norm, varies based on the role the employee plays.

What is a variable salary?

Variable pay is the portion of compensation determined by employee performance (commonly a commission). … Variable pay is the portion of sales compensation determined by employee performance. When employees hit their goals (aka quota), variable pay is provided as a type of bonus, incentive pay, or commission.

What if basic salary is low?

A higher basic would mean a higher HRA, DA and provident fund contributions. The DA is taxable and the PF contributions are tax-free but will reduce your take-home salary. On the other hand, reducing basic pay will mean a lower contribution towards retiral benefits, which may not be good in the long run.

Which is better CTC or gross salary?

Gross salary is the amount after the EPF and gratuity are subtracted from the CTC. Basically, the remuneration paid before deducting the income tax, professional tax, and other deductions. It is inclusive of bonuses, overtime pay, paid holiday amount, and other differentials.

Is PF part of CTC?

Most employers contribute 12% (called PF) of basic salary every month to employee’s Provident fund account, shown in CTC. An employee also contributes 12% (called VPF). … Employer PF is part of CTC not shown on Salary Slip.

What is a fixed salary definition?

A fixed salary means that every employee will be paid the exact same salary and equity as others that fall into their pay tier.

How is CTC calculated in salary?

It is calculated by adding salary to the cost of all additional benefits an employee receives during the service period. If an employee’s salary is ₹500,000 and the company pays an additional ₹50,000 for their health insurance, the CTC is ₹550,000. Employees may not directly receive the CTC amount.

What percentage of CTC is PF?

12%Your employer can contribute 12% to your EPF account if it is included in your CTC.

What is CTC and take home salary?

CTC stands for Cost to Company. It is the sum of total amount a company is spending for an employee in a year. It includes the Take Home Salary along-with other benefits such as medical facilities, travel allowance, company contributions to retirement funds, house bills and travel allowance.

Is basic salary fixed?

Basic salary is a fixed amount of money that an employee receives prior to any extras being added or payments deducted. It does not include bonuses, overtime pay or any other potential compensation from an employer. … Basic salary is different from gross pay and net pay.